INFINITE GROUP, INC. Incentive Stock Option Agreement Date: December 23, 2019
INFINITE
GROUP, INC.
Date:
December 23, 2019
Infinite Group,
Inc., a Delaware corporation (the “Company”), pursuant
to its 2019 Stock Option Plan (“the Plan”), hereby
grants ▇▇▇▇▇▇ ▇▇▇▇▇ (the
“Optionee”) an incentive stock option to purchase a
total of 250,000 shares
of the Company’s Common Stock, par value $.001 per share, at
the price of $.05 per share
on the terms and conditions set forth herein and in the Plan. As
used herein, the term “Company” includes any affiliates
of the Company.
1.
Duration.
(a)
This option shall
become effective on the date of grant and shall be exercisable as
for 250,000 shares on December 23, 2019.
(b) This
option shall expire five years from the date hereof on December 22,
2024 (the “Termination Date”).
2.
Written Notice of Exercise.
This
option may be exercised only by the delivery to the Secretary or
Treasurer of the company at its principal office within the time
specified in Paragraph 1, of a written notice of exercise
substantially in the form described in Paragraph 8.
3.
Anti-Dilution Provisions.
(a) If
there is any stock dividend, stock split, or combination of shares
of Common Stock of the Company, the number and amount of shares
then subject to this option shall be proportionately and
appropriately adjusted; no change shall be made in the aggregate
purchase price to be paid for all shares subject to this option,
but the aggregate purchase price shall be allocated among all
shares subject to this option after giving effect to the
adjustment.
(b)
If there is any
other change in the Common Stock of the Company, including
recapitalization, reorganization, sale of exchange of assets,
exchange of shares, offering of subscription rights, or a merger or
consolidation in which the Company is the surviving corporation, an
adjustment, if any, shall be made in the shares then subject to
this option as the Board of Directors may deem equitable. Failure
of the Board of Directors to provide for an adjustment pursuant to
this subparagraph prior to the effective date of any Company action
referred to herein shall be conclusive evidence that no adjustment
is required in consequence of such action.
(c)
If the Company is
merged into or consolidated with any other corporation, or if it
sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to
be made for the continuance of this option after such event, or for
the substitution for this option of an option covering the number
and class of securities which the Optionee would have been entitled
to receive in such merger or consolidation by virtue of such sale
if the Optionee had been the holder of record of a number of shares
of Common Stock of the Company equal to the number of shares
covered by the unexercised portion of this option, or (ii) the
Company shall give to the Optionee written notice of its election
not to cause such provision to be made and this option shall become
exercisable in full (or, at the election of the optionee, in part)
at any time during a period of 20 days, to be designated by the
Company, ending not more than 10 days prior to the effective date
of the merger, consolidation or sale, in which case this option
shall not be exercisable to any extent after the expiration of such
20 -day period. In no event, however, shall this option be
exercisable after the Termination Date.
4.
Investment Representation; Legend on Certificates; Special
Restriction on Resale.
The
Optionee agrees that until such time as a registration statement
under the Securities Act of 1933 becomes effective with respect to
the option and/or the stock underlying the option, the Optionee is
taking this option and will take the stock underlying the option,
for investment and not for resale or distribution. The Company
shall have the right to place upon the face of any stock
certificate or certificates evidencing shares issuable upon the
exercise of this option such legend as the Board of Directors may
prescribe for the purpose of preventing disposition of such shares
in violation of the Securities Act of 1933, as now or hereafter
provided.
5.
Non-Transferability.
This
option shall not be transferable by the Optionee other than by will
or by laws of descent or distribution, and is exercisable during
the lifetime of the Optionee only by the Optionee.
6.
Certain Rights Not Conferred by Option.
The
Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.
7.
Expenses.
The
Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of
the Company pursuant hereto and all other fees and expenses
necessarily incurred by the Company in connection
therewith.
8.
Exercise of Options.
(a)
An option shall be
exercisable by written notice of such exercise, in the form
prescribed by the Board of Directors to the Secretary or Treasurer
of the Company, at its principal office. The notice shall specify
the number of shares for which the option is being exercised (which
number shall be 50,000) and shall be accompanied by payment in full
of the purchase price of such shares. No shares shall be delivered
upon exercise of any option until all laws, rules and regulations,
which the Board of Directors may deem applicable, have been
complied with. If a registration statement under the Securities Act
of 1933, as amended (the “Act”) is not then in effect
with respect to the shares issuable upon such exercise, it shall be
a condition precedent that the person exercising the option give to
the Company a written representation and undertaking, satisfactory
in form and substance to the Board of Directors, that he is
acquiring the shares for his own account for investment and not
with a view to the distribution thereof.
(b) The
person exercising an option shall not be considered a record holder
of the stock so purchased for any purpose until the date on which
he is actually recorded as the holder of such stock in the records
of the Company.
(c) If
the Optionee ceases to serve as an employee of the Company, he may,
but only within thirty (30) days after the date he ceases to be an
employee of the Company, exercise this option to the extent that he
was entitled to exercise it as of the date of such termination. If
the Optionee shall have been an employee of the Company at the time
of his death or permanent disability, then this option shall be
exercisable by his personal representative or him, as the case may
be, for a period ending on the earlier of (i) one year from the
date of the death or permanent disability or (ii) the date on which
the option expires in accordance with its terms. Notwithstanding
the provisions of this Section 8(c), in the event that the
Employee’s employment is terminated “for cause,”
as such term is defined and interpreted by the courts of the State
of New York, the Employee’s right to exercise this Option
shall expire on the date of his termination.
9.
Covenant not to Compete or Otherwise Injure the Company; Work
Product.
The
acceptance by the Optionee of this option shall constitute the
acceptance of and agreement to all of the terms and conditions
contained herein and in the Plan, and shall further constitute a
covenant and agreement on the part of the Optionee to the effect
that, without any additional compensation:
(a)
The Optionee shall,
so long as he is affiliated with the Company, and for a period of
12 months after the termination of his affiliation with the
Company, he will not engage in any competitive activities as herein
defined:
(i)
Hiring, offering to
hire, enticing away or in any other manner persuading or attempting
to persuade any officer, employee or agent of the Company to
discontinue his relationship with the Company without the written
permission of the Company unless the Optionee clearly establishes
that the relationship was initiated by the other party
thereto;
(ii)
Directly or
indirectly soliciting, diverting, taking away or attempting to
solicit, divert, or take away any business of the Company of which
the Optionee has any knowledge during the term of his employment,
unless the Optionee clearly establishes that the relationship was
initiated by the other party thereto. The term
“business” shall mean actual or proposed contracts or
arrangements for products or services of the Company and any
reasonable extension or continuation of the business of the Company
as constituted upon the termination of Optionee’s
employment.
(b)
The Optionee shall
not make or permit to be made, except in pursuance of his duties
and for the sole use and account of the Company or its nominees,
any copies, abstracts or summaries of any Company reports, papers,
documents or programs, whether made by him or by
others.
(c)
The Optionee shall
keep confidential and not disclose to others, except as required by
his service as an employee or by law, any matter or thing
ascertained by him through his association with the Company, not
otherwise publicly known, the disclosure of which might possibly be
contrary to the best interest of any person, firm, or corporation
doing business with the Company, or of the Company.
10.
Governing
Plan.
This
Agreement is subject to the terms and conditions of the Plan, a
copy of which is available upon request from the Secretary of the
Company.
INFINITE
GROUP, INC.
By the
Company: _/s/ ▇▇▇▇▇
Villa_____________________________
▇▇▇▇▇
▇▇▇▇▇, President
Regarding: Option
agreement dated December 23, 2019 for 250,000 shares of the
Company’s Common Stock, par value $.001 per share, at the
price of $.05 per share, I accept the terms of this
agreement.
By the
Optionee: _/s/ ▇▇▇▇▇▇ ▇.
Reeve_________________________
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